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EUR/JPY Flatlines with neutral technical outlook as traders eye intervention risks

  • EUR/JPY holds steady near 184.75 in Thursday’s early European session. 
  • The cross keeps a neutral outlook, while RSI momentum hovers around the midline. 
  • The immediate resistance level emerges at 185.00; the initial support level to watch is 184.32. 

The EUR/JPY cross trades on a flat note around 184.75 during the early European session on Thursday. Markets remain cautious over further currency intervention after Japanese Finance Minister Satsuki Katayama stated that the official is prepared to take action at any time against excessive FX volatility. 

The stronger-than-expected Japanese Gross Domestic Product (GDP) growth for the first quarter (Q1) might support the Japanese Yen (JPY) and act as a headwind for the cross. Japan’s Q1 GDP beat forecasts, growing at an annualized rate of 2.1% against the estimated 1.7%.

On the other hand, hawkish comments from the European Central Bank (ECB) policymakers could lift the Euro (EUR) against the JPY. ECB policymaker Joachim ‌Nagel said on Tuesday that the central bank may have to act at its June meeting as the Iran energy shock proves persistent and the probability of broader inflation spreading continues to rise.

The majority of economists from the Reuters poll, around 85%, indicated that the ECB would raise its deposit rate by 25 basis points (bps) to 2.25% in June, up from just over half expecting that before the April meeting.

Chart Analysis EUR/JPY

Technical Analysis:

In the daily chart, EUR/JPY is consolidating in a sideways tone, holding above the 100-day simple moving average (SMA) while trading just under the 20-day Bollinger mid-line, which keeps the immediate bias broadly neutral after the recent pullback from the highs. The Relative Strength Index (RSI) at 47 is hovering around the midline, hinting at a lack of directional conviction rather than strong selling pressure.

On the topside, initial resistance is located at the Bollinger mid-band around 185.00, with a stronger cap emerging at the May 12 high of 185.46 if bulls regain traction. The next hurdle to watch is the upper Bollinger band near 187.15. On the downside, the 100-day SMA at 184.32 offers first support, ahead of the May 7 low of 183.50. The critical support level is seen at the lower Bollinger band around 182.88, where a sustained break would likely expose a deeper correction.

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USD/JPY Trades flat near 159.00 as investors seek fresh developments on Iran war

  • USD/JPY flattens around 159.00 in countdown to US-Iran deal announcement.
  • US President Trump said that Washington is in final stages over deal with Iran.
  • 10-year JGB yields remain firm due to growing Japan fiscal worries.

The USD/JPY pair trades calmly around 159.00 during the Asian trading session on Thursday. The pair turns sideways as investors await fresh developments regarding negotiations between the United States (US) and Iran, after President Donald Trump stated on Wednesday that talks are in “final stages”.

As of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, trades marginally higher to near 99.20. The DXY’s rally hit pause on Wednesday after posting a fresh six-week high at 99.47, following US President Trump expressing confidence that a deal with Iran would be finalized soon.

We’re in the final stages of Iran. We’ll see what happens. Either have a deal or we’re going to do some things that are a little bit nasty, but hopefully that won’t happen,” Trump said, Bloomberg reported.

The optimism over the US-Iran, which resulted in a sharp decline in oil prices, has also slightly diminished expectations supporting the Federal Reserve (Fed) to hike interest rates this year. According to the CME FedWatch tool, the odds of the Fed delivering at least one interest rate hike this year have cooled down to 51% from 61.3% seen on Tuesday. Still, there is a sharp turnaround from two interest rate cuts anticipated before the Middle East war started.

In Japan, the announcement of an extra budget by Prime Minister (PM) Sanae Takaichi, which aims to offset the impact of the Middle East situation has raised fiscal concerns. 10-year Japan Government Bond (JGB) yields are up 0.11% to near 2.77%, close to its multi-decade high of 2.81% posted on Tuesday.

USD/JPY technical analysis

USD/JPY trades almost flat at around 159.00 at the press time. The pair holds a modest bullish bias as it remains above the 20-day exponential moving average (EMA) at 158.37.

The Relative Strength Index (RSI) is around 55 points to neutral-to-positive momentum, hinting that buyers still have the upper hand while avoiding overbought conditions.

On the downside, immediate support is located at the 20-day EMA near 158.37, where a daily close below would weaken the constructive tone and open the door to a deeper corrective slide towards the May 14 low of 157.31. Looking up, the pair aims to revisit the April 30 high of 160.73.

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AUD/JPY – Tests ascending triangle bottom near 113.00

  • AUD/JPY may rebound toward the nine-day EMA of 113.72.
  • The 14-day Relative Strength Index near 50 hints at a current lack of directional conviction.
  • A break below the triangle would expose the 50-day EMA support at 112.44.

AUD/JPY extends its losses for the third successive day, trading around 113.20 during the Asian hours on Monday. The technical analysis of the daily chart suggests a potential busted pattern or bearish failure as the currency cross is positioned on the lower trendline of an ascending triangle. A sustained break below the lower trendline would indicate that buyers have lost momentum and sellers have taken control.

The AUD/JPY cross holds a mildly bullish near-term bias as it remains above the 50-day Exponential Moving Average (EMA). The pair is consolidating after its recent pullback, with price now caught between short-term resistance at the nine-day EMA and underlying trend support from the longer EMA, while the 14-day Relative Strength Index (RSI) at roughly 50 signals neutral momentum and hints at a lack of directional conviction for now.

On the upside, the AUD/JPY cross may rebound toward the nine-day EMA of 113.72. A break above the short-term average would support the currency cross to test the all-time high of 114.74, aligned with the upper boundary of the ascending triangle around 115.00.

A successful break below the triangle would expose the 50-day EMA at 112.44. Further declines would put downward pressure on the AUD/JPY cross to navigate the region around the three-month low at 108.79, recorded on March 31.

AUD/JPY: Daily Chart

Australian Dollar Price Today

The table below shows the percentage change of Australian Dollar (AUD) against listed major currencies today. Australian Dollar was the weakest against the US Dollar.

USDEURGBPJPYCADAUDNZDCHF
USD0.02%0.08%0.10%0.00%0.22%-0.00%-0.02%
EUR-0.02%0.04%0.09%-0.02%0.20%-0.02%-0.05%
GBP-0.08%-0.04%0.02%-0.07%0.14%-0.07%-0.09%
JPY-0.10%-0.09%-0.02%-0.14%0.10%-0.15%-0.15%
CAD-0.01%0.02%0.07%0.14%0.22%0.00%-0.01%
AUD-0.22%-0.20%-0.14%-0.10%-0.22%-0.20%-0.20%
NZD0.00%0.02%0.07%0.15%-0.00%0.20%-0.01%
CHF0.02%0.05%0.09%0.15%0.01%0.20%0.01%

The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the Australian Dollar from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent AUD (base)/USD (quote).

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Japanese Yen holds steady ahead of Trump–Xi summit, US Retail Sales data

  • USD/JPY flat lines around 157.85 in Thursday’s early Asian session. 
  • US inflation came in hotter than expected, with the PPI rising by 6.0% YoY in April. 
  • Trump will hold a high-stakes meeting with Xi Jinping in China. 

The USD/JPY pair trades on a flat note near 157.85 during the early Asian session on Thursday. The major pair steadies as traders prefer to wait on the sidelines ahead of the US President Donald Trump-Chinese President Xi Jinping summit in Beijing and the release of the US April Retail Sales data later on Thursday. 

The latest US inflation data came in hotter than expected, fueling expectations that the US Federal Reserve (Fed) will maintain elevated long-term interest rates. This, in turn, could underpin the US Dollar (USD) against the Japanese Yen (JPY). 

The US Producer Price Index (PPI) jumped 6.0% YoY in April, following the 4.3% seen in March, according to the US Bureau of Labor Statistics on Wednesday. On a monthly basis, the PPI inflation rose to 1.4% in April from 0.7% in March and much higher than the estimate of 0.5%.

Bloomberg reported on Wednesday that Trump arrived in Beijing for a state visit to China, where he will meet with Xi Jinping to discuss topics including trade and the Iran war. This is the first state visit to China by a US leader in nine years. 

Nonetheless, the potential upside for the pair might be limited amid fears of further currency intervention from Japanese authorities. Japan’s Finance Minister Satsuki Katayama said last week that “regarding recent currency moves, we confirmed that Japan and the US have been coordinating very well and have maintained close communication.” 

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EUR moves little against JPY as risk aversion increases

  • EUR/JPY remains steady as the Euro declines, offsetting Yen weakness.
  • The OECD projects the Bank of Japan will increase short-term policy rates to 2% by the end of 2027.
  • Bundesbank President Joachim Nagel warned that rising energy costs make an ECB interest rate hike increasingly likely.

EUR/JPY remains flat after registering modest losses in the previous day, trading around 185.00 during the Asian hours on Wednesday. The currency cross remains stable as the Euro’s (EUR) decline is driven by a wave of risk aversion following faded hopes for Middle East peace, which effectively offsets Japanese Yen (JPY) weakness.

However, the Japanese Yen may gain ground against its major peers as the Bank of Japan’s April Summary of Opinions revealed that policymakers are considering further rate hikes as early as their next meeting, driven largely by inflation risks linked to rising oil prices.

The Organisation for Economic Co-operation and Development (OECD) has recommended that Japan primarily utilize consumption tax increases to bolster its national revenue. On the monetary front, the Bank of Japan (BOJ) is projected to raise short-term policy rates to 2% by the end of 2027, though it must remain flexible enough to modify the pace and maturity of its bond-buying activities should financial or bond market disruptions occur.

The Euro may also receive support from a hawkish tone surrounding the European Central Bank (ECB) policy outlook. Bundesbank President Joachim Nagel said on Wednesday that the probability that the central bank will need to raise borrowing costs due to the Iran war is rising. Meanwhile, ECB Governing Council member Martin Kocher said on Monday that there’s no need to delay the interest rate hikes if energy prices don’t improve swiftly.

On the data front, Japan’s current account surplus increased to JPY 4,681.5 billion in March from JPY 3,625.3 billion in the same month a year earlier. These figures surpassed market expectations of JPY 3,879 billion, marking the largest amount on record. Traders now await the Eurozone quarterly Gross Domestic Product (GDP) and Employment Change data for the first quarter of 2026 due later in the day.

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EUR gains against the JPY following Japan’s Household Spending data

  • EUR/JPY rises as the Japanese Yen weakens following disappointing Japanese household spending data and shrinking consumer demand.
  • The BoJ Summary shows some members favor rate hikes while others urge caution regarding Middle East instability.
  • The Euro gains ground as hawkish ECB rhetoric fuels expectations for continued interest rate hikes through June.

EUR/JPY extends its gains for the fourth successive day, trading around 185.40 during the Asian hours on Tuesday. The currency cross appreciates as the Japanese Yen (JPY) struggles following the disappointing release of Japan’s Household Spending data.

Japan’s economic outlook faced renewed pressure on Tuesday after the internal affairs ministry reported a significant 2.9% year-over-year drop in consumer spending for March. This steeper-than-expected decline marks the fourth consecutive month of shrinking personal expenditures, as persistent inflationary pressures continue to erode household purchasing power. The data underscores a fragile domestic recovery, further complicated by growing global economic anxiety stemming from the escalating tensions between the United States and Iran.

Inside the Bank of Japan (BoJ), policymakers appear to be navigating a complex path toward normalization. The Summary of Opinions from the April meeting revealed that while some members believe real interest rates are low enough to support further hikes, others remain wary of the unpredictable Middle East situation. Despite these geopolitical uncertainties, the consensus suggests that a rate hike remains likely as early as the next meeting. This hawkish tilt was complemented by diplomatic efforts, as Finance Minister Satsuki Katayama reaffirmed close cooperation on currency stability with US Treasury Secretary Scott Bessent.

Meanwhile, the EUR/JPY cross continues to gain traction, bolstered by a resilient Euro (EUR) and a decisively hawkish European Central Bank (ECB). Governing Council member Martin Kocher emphasized that the bank will not hesitate to push forward with interest rate hikes if energy prices remain elevated. With financial markets now pricing in a 92% probability of a rate hike in June and anticipating three total increases by 2026, the widening policy divergence between the ECB and the BoJ is providing a steady tailwind for the pair.

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Japan’s Katayama: US and Japan affirm close cooperation on currency moves

Japan’s Finance Minister Satsuki Katayama said that Japan and the United States (US) reaffirmed their ‌close cooperation on currency moves after a meeting with US Treasury Secretary Scott Bessent, Reuters reported on Tuesday.

Key quotes

Reaffirmed close cooperation on joint statement from last year. 

Discussed wide global cooperation on crucial mineral supply chains. 

Two countries in close contact, will continue to coordinate closely with Bessent. 

Will not discuss BoJ’s particular monetary policy tools. 

China may close gap in high-tech sectors within six months to a year, but not currently. 

Trust us, Japan is aligned in managing critical mineral supply chain. 

Discussions on currency coordination with US have intensified. 

No talks with Bessent on Tokyo’s fiscal policy. 

Unable to disclose if monetary policy talks occurred. 

Comfortable with economic panel suggestion that BoJ consider firms’ financing circumstances. 

We have not yet stepped into oil futures market. 

Hard to forecast June outlook, declines to comment on possibility of BoJ rate hike in June. 

Market reaction

As of writing, the USD/JPY pair is up 0.22% on the day at 157.50.

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Japanese Yen drifts lower vs USD as weak Household Spending data counters hawkish BoJ

  • USD/JPY edges higher as Japan’s disappointing consumer spending data weighs on the JPY.
  • Rising US-Iran tensions underpin the safe-haven USD and also lend support to spot prices.
  • The divergent BoJ-Fed expectations might cap the pair as traders await the US CPI report.

The USD/JPY pair attracts some buyers for the second straight day and advances to a four-day high following the disappointing release of Japan’s Household Spending data this Tuesday. Spot prices, however, lack bullish conviction amid mixed fundamental cues and currently trade just below the mid-157.00s area, up 0.15% for the day.

Japan’s internal affairs ministry reported earlier today that consumer spending fell 2.9% YoY in March, compared to a 1.8% drop in the prior month and missing market estimates. This also marks the fourth consecutive month of decline in personal spending amid persistent inflationary pressure and comes on top of economic concerns stemming from rising US-Iran tensions, which, in turn, undermines the Japanese Yen (JPY). Apart from this, a modest US Dollar (USD) uptick acts as a tailwind for the USD/JPY pair.

The recent optimism over a potential US-Iran peace deal faded rather quickly amid major disagreements over Tehran’s nuclear program and a standoff over the critical Strait of Hormuz. Furthermore, US President Donald Trump said that the ongoing US-Iran ceasefire was “unbelievably weak” and was on “massive life support.” This keeps geopolitical risks in play and underpins the USD’s reserve currency status. The USD bulls, however, opt to wait for the release of the US consumer inflation figures later today.

The crucial data will play a key role in influencing market expectations about the US Federal Reserve’s (Fed) policy outlook and provide some meaningful impetus to the USD. In the meantime, traders have been scaling back their bets for a Fed rate hike in 2026, which marks a significant divergence in comparison to the BoJ’s relatively hawkish outlook. In fact, BoJ’s Summary of Opinions from the April meeting left the door open for an imminent rate hike. This might further contribute to capping the USD/JPY pair.